No. 92-083 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

JAMES ALLISON, 

Plaintiff and Respondent, 

v. 

JUMPING HORSE RANCH, INC., 

Defendant and Appellant. 

APPEAL FROM: District Court of the Fifth Judicial District, 

In and for the County of Madison, 

The Honorable Frank Davis, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Richard C. Nellen and James A. McLean, 

Drysdale, McLean, Nellen & Nellen, 

Bozeman, Montana; Michael P. Sand, Sand 

Law Offices, Bozeman, Montana 

For Respondent: 

Edmund P. Sedivy, Jr., and David L. Weaver, 

Morrow, Sedivy & Bennett, Bozeman, Montana 

Submitted on Briefs: August 6, 1992 

Decided: December 8, 1992 

Filed: 
Justice William E, Hunt, Sr., delivered the opinion of the Court. 

Respondent James ~llison brought his claim for wrongful 

discharge in the Montana Fifth Judicial District Court, Madison 

County. Appellant Jumping Horse Ranch filed a motion for summary 

judgment claiming the statute of limitations had passed. The 

motion was denied by the District Court. After respondent had 

presented his case in chief, appellant moved for a directed verdict 

on the same basis as the motion for summary judgment, which was 

also denied, The jury returned a verdict in favor of respondent. 

Appellant appeals from both denials. 

We affirm. 

We rephrase appellant's issue as follows: 

At what point, under 8 39-2-911(1), MCA, of the Wrongful 

Discharge From Employment Act, does the statute of limitations 

begin to run? 

In 1971, respondent was hired as a ranch manager by Robert M. 

Beck, owner of the Jumping Horse Ranch, Inc. (hereinafter qtranchtl) . 

Respondent worked for appellant for approximately 17 years. 

Apparently during the 1980s the ranch began losing money. On 

July 12, 1988, Beck notified respondent that he was to be 

terminated as an employee because Beck believed he was burned out 

on ranching and would "jump shiptt and start his own outfitting 

business. However, on the same day, Beck requested that respondent 

stay on until October 1, 1988, to assist and train the new manager, 

which respondent agreed to do. Respondent continued to receive his 
$3000 monthly salary and benefits. On November 3, 1988, Beck, as 

president of the ranch, signed a census report regarding the 

ranch's employee pension program which listed respondent's date of 

termination as October 1, 1988. On September 29, 1989, respondent 

filed a complaint for wrongful discharge against appellant. 

Respondent complained that he was wrongfully terminated because of 

Mrs. Helen Beck's figrumblings.l' 

On May 29, 1990, appellant filed a motion for summary judgment 

on the basis that the statute of limitations had passed, pursuant 

to 5 39-2-911 (1) , MCA. The motion was denied. After respondent 

presented his case in chief, appellant moved for a directed verdict 

on the same basis. This motion was also denied. On January 24, 

1992, the jury returned a unanimous verdict in favor of respondent. 

Appellant appeals the denial of both motions. 

At what point, under 39-2-911(1), MCA, of the Wrongful 

Discharge From Employment Act, does the statute of limitations 

begin to run? 

Appellant argues that the time begins to run from the notice 

of discharge. 

The legislature has expressly intended that the Wrongful 

Discharge From Employment Act be the exclusive remedy for wrongful 

discharge. Section 39-2-902, MCA. The Act preempts common law 

remedies and alters the statute of limitations that could be 

obtained under common law theory for breach of the implied covenant 

of good faith and fair dealing. Sections 39-2-913 and -911, MCA. 

3 
The statute of limitations for bringing a wrongful discharge 

claim is governed by § 39-2-911 (I), MCA, which states that "an 

action under this part must be filed within 1 year after the date 

of discharge. " Section 39-2-903 (2) , MCA, defines "discharge" as 

including: 

[Clonstructive discharge as defined in subsection (1) and 

any other termination of employment, including 

resignation, elimination of the job, layoff for lack of 

work, failure to recall or rehire, and any other cutback 

in the number of employees for a legitimate business 

reason. [Emphasis added.] 

The statute fails to define "termination of employment" and is 

silent as to when the "termination of employment" would become 

effective. Therefore, we must determine what was the intention of 

the legislature when the Wrongful Discharge From Employment Act was 

passed. 

In order to make that determination we must first look to the 

plain meaning of the words used in the statute. Missoula County v. 

American Asphalt, Inc. (1985), 216 Mont. 423, 701 P.2d 990. To 

interpret a phrase within the plain meaning rule, ""the language 

used must be reasonably and logically interpreted, giving words 

their usual and ordinary meaning."" American Asphalt, 701 P.2d at 

992 (quoting In re Matter of McCabe (1975) , 168 Mont. 334, 339, 544 

P.2d 825, 828). 

'ITermination of employment" is a term of art and refers to the 

existence of the relationship of employer and employee. It has 

been defined to mean "a complete severance of the relationship of 
employer and employee by positive act on the part of either or 

both." Edwards v. Equitable Life Assur. Soc. (Ky. 1944), 177 

S.W.2d 574, 577. See also Black's Law ~ictionary 1641 (Rev. 4th 

ed. 1968). We have previously defined "terminate" as meaning 

'Iu[t]o put an end to; to make to cease; to end."" Towne v. Towne 

(1945), 117 Mont. 453, 465, 159 P.2d 352, 357, (quoting Webstergs 

International Dictionary (2d ed. ) ) . 

Appellant contends that respondent failed to file his claim 

for wrongful discharge within the applicable statute of limitations 

under 5 39-2-911, MCA, and relies on our holding in arti in v. 

Special Resource Management, Inc. (1990), 246 Mont. 181, 803 P.2d 

1086. In Martin, we stated that the statute of limitations begins 

to run on a terminated employee's action for breach of the implied 

covenant of good faith and fair dealing on the date of notice given 

to the employee. Appellant argues that although Martin did not 

address the Wrongful isc charge From Employment Act, the reasoning 

behind the decision is still valid in that if a person is standing 

on the edge of a cliff and is pushed off, he need not wait to hit 

the ground before knowing his cause of action accrued. We 

disagree. 

We specifically limited the holding in Martin to the facts of 

the case. In that case, the appellant was given notice on June 2.6, 

1987, that her position would be terminated on July 17, 1987, 

slightly more than two weeks after the Wrongful Discharge From 

Employment Act became effective. The issue phrased in arti in was 

5 
It[a]t what point did an actionable cause for termination arise in 

this case--upon notice of the termination or when termination 

became effective?" [Emphasis added.] Martin, 803 P.2d at 1087. 

This Court held that it was upon notice of termination because all 

of the elements of her cause of action accrued at the time of 

notice, and therefore, the Wrongful Discharge From Employment Act 

was not applicable to her cause of action. 

In Kitchen Krafters, Inc. v. Eastside Bank (1990), 242 Mont. 

155, 789 P.2d 567, which is also a case based on the theory of 

breach of the implied covenant of good faith and fair dealing, we 

analyzed when an action commenced under § 27-2-102, MCA, by 

stating: 

(1) For purposes of statues relating to the 

time within which an action must be commenced: 

(a) a claim or cause of action accrues 

when all elements of the claim or cause exist 

or have occurred, the right to maintain an 

action on the claim or cause is complete and a 

court or other agency is authorized to accept 

jurisdiction of the action. 

(2) Unless otherwise provided by statute, the 

period of limitation begins when the claim or 

cause of action accrues. Lack of knowledge of 

the claim of cause of [sic] action, or its 

accrual, by the party to whom it has accrued 

does not postpone the beginning of the period 

of limitation. 

As the language of this statute makes clear, the 

statute of limitations does not begin to run until all 

elements of a cause of action are in existence. For 

example, in a negligence action the plaintiff must prove 

four elements: 
1) Existence of a duty 

2) Breach of the duty 

3) Causation 

4) Damages. 

. . . If these elements are not in existence, the 

plaintiff could not successfully bring a cause of action 

based upon negligence. Therefore, although one may be 

able to establish the existence and breach of a duty, he 

cannot successfully assert his cause of action until he 

has sustained an injury . . . . [Citations omitted.] 

Kitchen Krafters, 789 P.2d at 571. 

Under the Wrongful Discharge From Employment Act, damages do 

not occur until the employee is no longer earning compensation from 

the employer, which under the Act is lost wages and fringe 

benefits, and this can only occur upon a complete severance of the 

employer-employee relationship. 

In this instance, there was not a complete severance of the 

employer-employee relationship. Respondent continued to work for 

appellant for another two months, training another individual as a 

ranch manager. He continued to earn his usual pay and benefits. 

In addition, appellant signed a pension plan census report stating 

that respondent's date of termination was October 1, 1988. 

Respondent's cause of action would not accrue until he stopped 

earning his salary and benefits. The Wrongful Discharge From 

Employment Act grants that an employee may be "awarded lost wages 

and fringe benefits for a period not to exceed 4 years from the 

date of discharge . . . ." Section 39-2-905(1), MCA. Respondent 
lost his wages and fringe benefits on October 1, 1988. We hold 

that the District Court did not err in denying appellant's motion 

for summary judgment and directed verdict. 

We affirm. 

Justice 

We concur: 
1 December 8, 1992 

CERTIFICATE OF SERVICE 

I 

I hereby certify that the following order was sent by United States mail, prepaid, to the following 

named: 

Michael P. Sand 

Sand Law Offices 

502 So. 19th Ave. 

Bozeman. MT 59715 

Richard A. Nellen and James A. McLean 

Drysdale, McLean, Nellen & Nellen 

1800 W. Koch, Ste 5 

Bozeman, MT 59715 

Edmund P. Sedivy, Jr. and David L. Weaver 

Morrow, Sedivy & Bennett 

P.O. Box 1168 

Bozeman, MT 59771-1168 

ED SMITH 

CLERK OF THE SUPREME COURT